SUMMIT FINANCIAL SERVICES GROUP INC(NDA) 
By BOCA RATON, Fla., Aug. 16 /PRNewswire-FirstCall/ -- Summit Financial Services Group, Inc. (OTC Bulletin Board: SFNS) announced financial results for the three- and six month-periods ended June 30, 2010. For the three month period ended June 30, 2010 (the "2010 Quarter"), the Company reported revenues of approximately $15.2 million, which represented an increase of approximately $5.0 million, or approximately 50%, from the approximately $10.2 million in revenues reported for the three month period ended June 30, 2009 (the "2009 Quarter"). For the 2010 Quarter, the Company reported net income of approximately $295,000, or an increase of approximately 230% from net income of approximately $89,000 reported for the 2009 Quarter.
For the six month period ended June 30, 2010 (the "2010 Period"), the Company reported revenues of approximately $30.3 million, which represented an increase of approximately $12.0 million, or approximately 66%, from the approximately $18.3 million in revenues reported for the six months ended June 30, 2009 (the "2009 Period"). For the 2010 Period, the Company reported net income of approximately $159,000, compared with approximately $3,000 reported for the 2009 Period.
Marshall Leeds, the Company's Chairman, Chief Executive Officer and President, stated: "we believe that our revenue growth in 2010 when compared with 2009 was largely attributable to both our success in recruiting some of the finest advisors in the industry, as well as an overall improvement in investor confidence. Additionally, we are pleased to report not only higher net income for both the three- and six-month periods, but higher EBITDA as well. For the three-month period, the Company generated EBITDA of approximately $767,000, as adjusted, and approximately $1,393,000, as adjusted, for the six month period." Mr. Leeds continued: "We believe that these accomplishments were made possible by the hard work and dedication of our financial advisors, their staffs and our home office associates."
The Company is a Florida-based financial services holding company that provides, through its operating subsidiary, Summit Brokerage Services, Inc. ("Summit Brokerage"), a broad range of securities brokerage and investment services to primarily individual investors. Summit Brokerage also sells insurance products, predominantly fixed and variable annuities and life insurance through its subsidiary, SBS Insurance Agency of Florida. Summit Brokerage also provides asset management services through its investment advisor, Summit Financial Group, Inc.
Summit Brokerage is registered with the Securities and Exchange Commission (SEC), and is a member of FINRA (f/k/a NASD), the Municipal Securities Rule Making Board, and the National Futures Association. The Company currently offers its services through a network of approximately 315 registered representatives, and its business plan is focused primarily on increasing its network of affiliated registered representatives through recruitment as well as by acquisitions.
The following table presents a reconciliation of EBITDA, as adjusted, to net income as reported:
Three Months Ended
June 30,
------------------
2010 2009
Net Income as reported $294,949 $89,421
Add: Depreciation 43,753 18,242
Amortization -
notes 104,483 58,403
Non-cash
compensation 131,332 98,764
Income tax
expense 192,520 -
------- ---
$767,037 $264,830
Six Months Ended June
30,
----------------------
2010 2009
Net Income as reported $159,069 $3,299
Add: Depreciation 92,428 37,553
Amortization -
notes 220,393 98,434
Non-cash
compensation 585,835 252,964
Income tax
expense 335,520 -
------- ---
$1,393,245 $392,250
Earnings before interest, taxes, depreciation and amortization, or EBITDA, adjusted for non-cash compensation expense is a key metric the Company uses in evaluating its financial performance. EBITDA is considered a non-GAAP financial measure as defined by Regulation G, promulgated by the SEC under the Securities Act of 1933, as amended. The Company considers EBITDA, as adjusted, important in monitoring and evaluating its financial performance on a consistent basis across various periods, as well as for purposes of, analyzing and evaluating financial and strategic planning decisions regarding future operating investments and potential acquisitions. The Company believes that EBITDA, as adjusted, eliminates items that are not part of its core operations, or do not involve a cash outlay, such as stock-related compensation. EBITDA, as adjusted, should be considered in addition to, rather than as a substitute for, pre-tax income, net income and cash flows from operating activities.
Summit Financial Services Group, Inc.
Condensed Consolidated Statements of Income
Quarter Ended June 30, 2010
For The Three Months Ended June 30,
2010 2009
---- ----
(Unaudited) (Unaudited)
Revenues
Commissions $14,631,425 $9,743,970
Interest and dividends 355,887 322,733
Other 233,788 133,545
------- -------
15,221,100 10,200,248
---------- ----------
Expenses
Commissions and clearing
costs 12,504,508 8,180,070
Employee compensation and
benefits 1,438,533 1,146,344
Occupancy and equipment 195,830 154,533
Communications 69,164 99,905
Depreciation and
amortization 43,753 18,242
Other operating expenses 481,843 511,733
------- -------
14,733,631 10,110,827
---------- ----------
Income before income taxes 487,469 89,421
------- ------
Provision for income taxes 192,520 -
------- ---
Net income $294,949 $89,421
-------- -------
Basic income per common
share $0.01 $0.00
----- -----
Diluted income per common
share $0.01 $0.00
----- -----
Weighted average common
shares outstanding:
Basic 25,920,288 25,458,634
Diluted 30,247,462 29,996,406
Summit Financial Services Group, Inc.
Condensed Consolidated Statements of Income
Six Months Ended June 30, 2010
For the Six Months Ended June 30,
---------------------------------
2010 2009
---- ----
(Unaudited) (Unaudited)
Revenues
Commissions $29,151,542 $17,414,460
Interest and dividends 694,982 623,909
Other 433,835 239,887
------- -------
30,280,359 18,278,256
---------- ----------
Expenses
Commissions and clearing
costs 24,995,101 14,428,861
Employee compensation
and benefits 3,157,792 2,338,673
Occupancy and equipment 410,685 310,310
Communications 171,693 212,800
Depreciation and
amortization 92,428 37,553
Other operating expenses 958,071 946,760
------- -------
29,785,770 18,274,957
---------- ----------
Income before income
taxes 494,589 3,299
------- -----
Provision for income
taxes 335,520 -
------- ---
Net income $159,069 $3,299
-------- ------
Basic income per common
share $0.01 $0.00
----- -----
Diluted income per
common share $0.01 $0.00
----- -----
Weighted average common
shares outstanding:
Basic 25,834,100 24,458,634
Diluted 28,882,954 30,186,254
"Forward-looking" Statements
This press release may contain "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995, as amended. Any such statements are made pursuant to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and they involve a number of risks and uncertainties that could cause actual results to differ materially from those that may be anticipated by or from the forward-looking statements. Important factors that could cause such a difference are set forth in the Company's filings with the Securities and Exchange Commission and include, but are not limited to, investor confidence and the performance of the securities markets, and the availability of suitable candidates for the Company's acquisition or recruitment.
SOURCE Summit Financial Services Group, Inc.
